New report shows tax laws in several states allow home equity theft
November 29, 2022
Arlington, VA; November 29, 2022: A new report released today by Pacific Legal Foundation shows that tax laws in several states allow local governments and private investors to steal substantial amounts of home equity from homeowners who are late on their property taxes. It is the first national study to expose the injustice of home equity theft through tax foreclosure.
The report “End Home Equity Theft” finds that 12 states and Washington D.C. have laws on the books that regularly allow local governments or private investors to take dramatically more than what is owed from homeowners who are behind on their property taxes. Additionally, the report finds that there are ten more states that protect home equity in the foreclosure process but provide loopholes to allow governments or private entities to seize excess equity value that should belong to the homeowner. These laws have allowed government officials to take homes that have been in families for generations and leave some people homeless over tax debts that amount to less than one percent of their property’s value.
“Our findings are alarming,” said Angela Erickson, strategic research director at Pacific Legal Foundation. “Home equity theft is robbing thousands of people of their homes and all the equity they’ve built. A system that allows governments and private investors to take more than what is owed creates a perverse incentive to work against the homeowner — not with the homeowner — to get the tax debt paid.”
In addition to the “End Home Equity Theft” report, PLF also recently filed three petitions (Fair, Nieveen, and Tyler) with the U.S. Supreme Court on behalf of clients who have suffered from unjust home equity theft.
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Pacific Legal Foundation is a national nonprofit legal organization that defends Americans threatened by government overreach and abuse. Since our founding in 1973, we challenge the government when it violates individual liberty and constitutional rights. With active cases in 34 states plus Washington, D.C., PLF represents clients in state and federal courts, with 17 wins of 19 cases litigated at the U.S. Supreme Court.